2 Content Proposition Service Logistics Why invest in better after sales services?Service Logistics Supply ChainService Logistics expertise in the NetherlandsSpare parts control tower solutionsMaintenance solutionsReversed logistics solutions36162846657886
4 Proposition to OEMs“ Dutch Service Logistics solutions enable your service organization to improve customer satisfaction by increased system availability and reliability and reduce operational costs through intelligent and optimized forecasting, planning and scheduling of the service chain (internal or external) and its associated resources such as people, networks, information and other tangible (or intangible) assets.”
5 Proposition to asset owners “ Dutch Service Logistics solutions enable your organization to improve system availability and reliability and reduce operational costs through intelligent and optimized forecasting, planning and scheduling of the service chain and its associated resources such as people, networks, information and other tangible (or intangible) assets. “
7 Service LogisticsService logistics is the control of all after-sales services: from product delivery to the end of a product's life cycle.Service logistics regards all logistics activities needed to enable advanced capital goods to function optimally and uninterrupted during the total product life cycle – up until out-of-order/ dismantling or reuse.The main function of the service supply chain is to increase the system availability by delivering the maintenance resources within specified time constraints when a system has failed, or to prevent failing and specific maintenance resources are needed to repair it. In general, spare parts and service engineers are the most important resources.
9 Total Cost of Ownership engineer-to-order system The acquisition costs of a high tech system are high, but a considerable cost during the total product life cycle is derived from maintenance and downtime.Maintenance costs include spare parts, service engineers, infrastructure and management.Downtime costs include reduced output of a production process, as well as indirect costs such as loss of reputation or loss of future revenues.Division of Total Cost of Ownership for an engineer-to-order system (cf. Oner et al. ).The acquisition costs account for only a fraction of the Total Cost of Ownership!Maintenance during the first years of the operation phase of a system is of the same order as the purchase of a new system.Source: Van Houtum, 2008
10 Minimizing downtime and minimizing TCO Service logistics aims at minimizing downtime and minimizing TCOThe key to service logistics is to have the right spare parts at the right time for maintenance. Complexity of the planning management of the resources: engineers and spare partsSource: Van Houtum, 2008
11 Service logistics - Key B2B sectors Aerospace & defense: maintenance, repair & overhaul delivery in a cost-effective way, is key in performance-based service contracts to customers.Automotive: service and parts operation is key for the business model and brand reputation, for customer satisfaction and avoiding warranty costs and for sustaining profitable growth.Advanced high-tech capital goods: move towards selling ‘performance service offerings’ instead of the product, guaranteeing performance level during the product’s lifecycle and minimizing machine or vessel downtime.Process and energy industries: integrated service supply of e.g. wind farms and process installations, minimizing downtime for preventive and corrective maintenance.Healthcare and medical devices: requiring service level agreements with same-day service fulfillment, in need of fine-knit distribution and service networks enabling fast response.
12 Service logistics for aerospace & defense industry The capital goods in the aerospace and defense industries typically have a very long lifecycle; they are used up to 25 years and asset owners demand total care programs. The initial acquisition costs of these assets are high; often the maintenance and repair costs are double the initial acquisition costs. Downtime has high financial implications for the asset owners and safety is a most critical factor. For excellent spare parts management, Parts Obsolescence Management with last-time-buy decisions & Demand Forecasting Techniques as well as Parts redesign engineering and supply with replace-or-repair decisions are required for optimized inventory management. As these aerospace and defense assets have to be in use continuously and often in remote locations under rough conditions, especially in defense when on missions, this poses particular challenges to the service logistics.
13 Service logistics for high-tech capital goods industry Capital goods are machines or products that are used by manufacturers to produce their end products or that are used by service organizations to deliver their services. Examples include lithography systems, large-scale computers, and baggage handling systems. The users’ primary processes depend heavily on the availability of these capital goods and they require very high levels of availability. There is a long-term trend with regard to these advanced capital goods in which buyers would rather purchase a function than a product, focusing on the Total Cost of Ownership (TCO).
14 Service logistics for process and energy industry Many process industry companies experiment intensively with condition-based maintenance (CBM), but preventive maintenance is still the norm. Several characteristics of the process industries make maintenance/logistics planning particularly complex. Most companies operate a small number of (custom-made) complex assets, and obtain limited reliability/process/failure data, making it hard to plan maintenance and preparatory logistics activities. Multiple disciplines and contractors are involved in maintenance operations, and coordination is required to minimize down-time.
15 Service logistics for marine industry In the maritime sector, service logistics support and maintenance of systems constitute a significant fraction of the exploitation costs. This is on the one hand due to the complexity and high capital value of the assets used in this sector, and on the other hand due to the highly variable and mostly severe operating conditions encountered by ships and their subsystems. Moreover, since these assets are often operated at remote locations around the world, unplanned maintenance requires significant logistic effort and hence is very costly. This reveals that an important reason for the high costs for service logistics in the maritime sector is the uncertainty in demand.
17 Drivers for service logistics Customer satisfaction ranks highest among the objectives of after sales services, as companies are realizing that after sales hold an important lever to shape customer experience and awareness.Cost savings remain high on the agenda, especially in high tech industries.Revenue generation is receiving less attention worldwide, although in the Netherlands this has been recognized early, increasing the competitiveness of companies. It is expected that this is of increasing importance as a driver in the future, moving companies to servitization.Customers ask for the serviceLeads to better portfolio diversificationLeads to reduction of costs or work capitalLeads to improved competitivenessLeads to better profitSource: Roadmap Service Logistics, Innovatie Zuid (NL), 2013Source: Deloitte, From Necessity to Strategic Driver, Market Trends and Challenges in After Sales & reversed Logistics, 2013
18 Drivers for service logistics Drivers for professional service logistics, and especially towards predictive maintenance, range from customer satisfaction to asset availability, productivity and compliance.Source: Wannes Rosius, IBM, Predictive Maintenance 3 Nov2014 Eindhoven
19 Arguments for extending the service business Marketing benefitsAugmenting the product offeringIntensity of customer relationshipLock-in effect for customersLong-term customer relationship (strategic partnerships)Strategic benefitsDifferentiation opportunitiesComparison of offerings is more complexCollaborative innovation between customer and supplierService as entry barrier for competitorsService competencies more difficult to imitateFinancial benefitsHigher margins (product -1% to 3%; services 5-20%)Stable source of revenueHigh installed baseSize of the service market (service market 2 to 10x bigger than product market)Source: Prof Heiko Gebauer, University of StGallen, Switzerland, 2013)
20 Servitization: from goods centered to customer centered solutions Source: Filippo Visintin, Aalto University, 2012
21 The process of creating value by adding services to products Source: Oliva & Kallenberg, 2003
25 Profitability of service logistics 25-60%turnoverafter salesBased on service contracts and remanufacturing of disposed systems, 25 to 60% of the turnover on complex systems is made in the after-sales period at higher margins.According to a Deloitte survey, firms that excel at aftermarket service report that average profitability of these operations is 75 percent higher than overall business unit profitability. Services provide a long revenue stream, particularly when customers own systems for a long time, e.g. with aircraft for up to 25 years.75%higherprofitabilityLong revenue stream
26 Growth potential - market share Source: Deloitte – Global Service and Parts Management Survey
27 Market opportunitiesThe Netherlands seems to have a frontrunner position in long term maintenance as well as total supply chain thinking.Furthermore, the collaboration between universities and companies in the Netherlands is driving implementation of new knowledge and innovation in effective service logistics solutions.Competitive countries in Europe are Germany, UK, Belgium and France with well-developed OEM industries.For the Netherlands, it is in these countries that are most of the opportunities for export of knowledge and knowhow for cross-border control towers for service logistics supply chains.A benchmark study from the EU More4Core project regarding maintenance in the Netherlands, Belgium, Germany and France will be delivered in FEB 2015.US often do not have maintenance strategies, although servitization models are being implemented rapidly now.In emerging markets service logistics is often driven by a developing manufacturing base and future regulation, e.g. Brazil, Malaysia, Indonesia, South Africa.
29 Service supply chainThe main function of the service supply chain is to deliver the maintenance resources within specified time constraints when a system has failed and specific maintenance resources are needed to repair it. In general, spare parts and service engineers are the most important resources.Source: MaSelMa project plan, 2013
31 Service logistics differentiation Spare parts:ForecastingPlanningInventoryDeliveryMaintenance:CorrectivePredictiveCondition-basedServices:Reversed logistics
32 Main global trends & developments driving the increase of Service Logistics Increasingly complex technology used in capital goods and increased servitization, requiring more knowhow for maintenance and repair.Global footprint of OEMs, requiring global service logistics organization with increasing complexity within short service times and with service and repair locations shifting (e.g. in Europe to Eastern Europe).Emerging technologies in sensors, Internet-of-Everything and Big Data, impacting monitoring and diagnostics, and for example 3D printing and augmented reality, enabling on-site printing of spare parts and repair.Global visibility and transparency in supply chains by increased implementation of ICT, creating opportunities for service logistics optimization.Increased pressure on environmental impact, energy use and material reuse, with increasing regulation, e.g. in return logistics and remote diagnostics and repair, and remanufacturing.Aging of society, leading to increased use of robotics and digital solutions in healthcare, with changed service landscapes.
33 Main trends & developments in Service Logistics Forecasting future demand for spare partsService Logistics Control Towers orchestrate after-sales-service of a product system, including forecasting, planning, inventory management and delivery.Pooling of spare parts across several supply chains; sharing of high value, slow moving parts.Contract management – servitization service level agreementsLocation management and stock allocation to new parts and repairables to reach target service levelsReturn logistics: WEEE directive (Waste Electrical and Electronic Equipment) requires a manufacturer or distributor to collect and recylce products at the end of the product life cycle
34 WEEE Directive driving service logistics uptake The Waste Electrical and Electronic Equipment Directive (WEEE Directive) is the European Community directive 2002/96/EC on waste electrical and electronic equipment (WEEE) which, together with the RoHS Directive 2002/95/EC, became European Law in February The WEEE Directive set collection, recycling and recovery targets for all types of electrical goods, with a minimum rate of 4 kilograms per head of population per annum recovered for recycling by The RoHS Directive set restrictions upon European manufacturers as to the material content of new electronic equipment placed on the market. The WEEE Directive is applicable to small and large household appliances, IT and telecommunications equipment, lighting equipment, electrical and electronic tools, leisure toys and sports equipment, medical devices, monitoring and control instruments and automatic dispensers.Historic equipment: on the market prior to 2005: owner responsible for recyclingNon-historic equipment: on the market after 2005: producer/ distributor responsible to collect and recycle.
35 Main trends & developments in maintenance industry the Netherlands and Belgium compared Source: More4Core project, 2014
36 Supply chain characteristics Product supply chainService supply chain‘Just-in-time’ principle‘Just in case’ principleHigh transport volumesLow transport volumesHigh stock turnover rateLow stock turnover rateSource: Van Laarhoven, 2008Service supply chain management is more complicated than that of finished products.Service supply chain scenarios are highly uncertain and unstable because the random nature of situations requiring product support - a broken part threatening to bring down a production line, for instance - is nearly impossible to predict. These depend on the type of maintenance strategy (see next slide)Unique requirements - including forward and reverse repair flows across a network of customer and partner locations, managing repair facilities, and volatile engineering changes that result in part supersessions - further complicate matters.Source: Gordian, 2013
37 Supply chain characteristics related to maintenance classification PreventiveLarge scaleSmall scaleCorrectiveSize:Number of callsQuantity per callHighLowPlanabilityGoodGood (in theory)Bad to reasonablePredictabilityBadSource: Rustenburg, Sparevision/ Gordian, 2005
38 Supply chain Spare parts classification based on maintenance and costs Material Requirements Planning(MRP)Spare Parts Management (SPM)MRP/SICStatistical Inventory Control (SIC)ExpensiveCheapPreventiveCorrectiveSource: Rustenburg, Sparevision/ Gordian, 2005
39 Maintenance modelsService logistics is moving to predictive maintenance based on big data derived from sensors in the product to decrease total cost of ownership by right-on-time maintenance.Too lateToo earlyRight on timeSource: Ruud Teunter, 2013
42 Critical factors for service supply chain Number of initially sold products/ systemsQuality of initial productGeographical spread of sales determines the international design of the service supply chainProduct life cycle phase determines service; repair, refurbishment, returnHow the products are operated (scheduled downtime for example allowing for repair time)Delivery capability - from the availability of parts, to a complete and timely delivery, to avoiding extremely costly down-times and to guarantee high parts availability.Spare parts management:UnpredictabilitySlow moving expensive partsLast time buyQuick responseCertificationQuality assuranceMaintenance:Imperfect warningsData gathering and analysis, heterogeneityComplexity of maintenance strategiesReal-time decision-makingCollaboration in the supply chainMaintenance service level agreementsReverse logistics:Outsourcing of manufacturingProduct complexityEnvironmental pressure/ regulationCost pressure
43 Top ten barriers to service excellence Source: Deloitte – Global Service and Parts Management Survey
44 Service logistics services Order managementExchange logisticsReturn authorizationEasy SWOPReturn logisticsInstallationInventory optimizationPackagingControl Tower designCustomer serviceControl Tower operationRemote monitoring(Bonded) Warehouse managementData science analyticsPUDO (pick-up drop-off)SortingCitystockReturn product screeningStock managementEnvironmental compliance servicesRefurbishmentCustomsRepairAsset recovery etcTransportation managementMaintenance planningSpare parts logisticsCustomer service management
45 Point of customs clearance Bonded warehousingArrivals from non EU origins Distribution to (EU) customersThe advantages of a Customs-bonded warehouse :Avoidance of double duty paymentPostponement of duty paymentPossibility of storage for an unlimited period of timeLess customs interferenceValue added logistics (assembly, configuration) in a customs-bonded warehousePoint of customs clearance
47 The Netherlands = Logistics Geographical position as gateway to EuropeExcellent Mainports (Rotterdam, Schiphol/ Amsterdam)Excellent Hinterland Connections (road, rail, barge, shortsea)Logistic Service Providers (1PL-4PL)Legislative framework & customsHigh level of knowledge:8 Universities with specialization in logistics / supply chain management, with over 45 professors/ research groups in this field11 Universities of Applied Research with over 150 specialized teaching staff with specialization in logistics / supply chain managementLogistics/ transport related GDP (2012):55 billion euros (10 % of GDP); 813,000 jobs (12% of Dutch workforce)
48 Dutch Collaboration for economic competitiveness Logistics is one of the nine priority sectors in Dutch economic policy. Government, business and academia work together to increase competitiveness, in business climate, education, infrastructure and innovation.Ambition logistics:In 2020, the Netherlands holds an international top positionin handling transport flows through the NL,as supply chain coordinator of international logistic activities andas a country with an attractive innovation and business climate
49 Service logistics in the Netherlands The Netherlands has a strong position in high-quality Service Logistics.Large companies, including ASML, DAF, Océ, IBM and Vanderlande, which have already strongly developed their after-sales service, operate their European or worldwide Service Logistics from the Netherlands. Some of these companies took an early lead in structuring complex service supply chains.Dutch universities have also carried out international trend setting research in the area of Service Logistics. Research is carried out together with industry leading to knowledge intensive practical solutions.Dutch education institutes offer highly skilled graduates.
50 Service Logistics players Type of companySupply chain roleExamples in the NetherlandsAsset ownerOwner of the system, often carries out the maintenance themselvesAirforce, DSM, DOW, Sabic, Marel, Nedtrain, ASML, Royal Navy, GasUnie etcService providerConducts maintenance at systems of asset ownerGTI, Stork, SPIE, Sitech, Cofely, Imtech, Wolter, Fokker ServicesParts suppliersSupply of spare parts and consumablesMAG45, Fabory, ADN, Technische UnieOEMsDevelops and manufactures systems, often also provides spare parts servicesPhilips Healthcare, Damen Shipyards, IHC, Wartsila, Vanderlande IndustriesSupplierDevelops and manufactures components and subsystems for OEMFrencken, Dutch Aero, Neways, NTS, Wilting, VDL, FaesLogistics Service SupplierSupplies transport, warehousing and value added servicesSLS, DHL, CEVA, Norbert Dentressangle, Janssen Distribution, Menlo, GeodisSource: Gordian Logistics Experts
51 Regional service clusters - examples North Netherlands; Offshore wind maintenanceSchiphol Airport Area;Aircraft parts, maintenance of passenger aircraft and aircraft systemsRotterdam;Service industry for marine vessels and process industryNorth-Brabant, esp Eindhoven; DC’s for electronics spare parts and companies for mechatronics maintenance and repairSouth West-Brabant;Maintenance of helicopters and jetsMaastricht Maintenance Boulevard; maintenance repair and overhaul of regional and business aircraft
52 Service Logistics - Knowledge institutes and universities University of GroningenUniversity of TwenteDelft University of TechnologyUniversity of Applied Sciences RotterdamErasmus University Rotterdam, School of EconomicsEindhoven University of TechnologyTilburg UniversityNetherlands Defense AcademyUniversity of Applied Sciences Breda (NHTV)
53 Maintenance Education Consortium The Maintenance Education Consortium (MEC) is the center of excellence for cross-sectoral maintenance education and the knowledge distribution center for maintenance companies. MEC provides innovation projects, knowledge development and knowledge transfer. MEC is related to the Dutch Institute of World Class Maintenance. MEC consists of seven regional education centers, three Universities of Applied Sciences, five universities and knowledge centre Kenteq.
54 Service Logistics Forum The Service Logistics Forum is the Dutch knowledge base in service logistics for knowledge development and exchange, aiming at the development of service logistics know-how and skills of all approx. 50 participating companies and institutions.
55 National innovation program in logistics The National Innovation program of the economic priority sector Logistics in the Netherlands focusses on six innovation roadmaps, in which innovation is driven and carried out by all partners in the supply chain.Neutral Logistics Information PlatformTrade compliance and border managementSynchromodalityCross Chain Control CentersService LogisticsSupply Chain FinanceService Logistics has been recognized as one of the internationally competitive strong areas with further development potential in the Netherlands and dedicated resources are geared to develop this field advance this competitive position even further.the control and coordination of all after-sales services: from product delivery to the end of a product's life cycle.
56 Dutch collaborative innovation in logistics 1.Open innovation2.Public private partnerships: triple helix collaboration3.Supply chain collaboration and coordination
57 Innovation roadmap Service Logistics The Netherlands has designated a special innovation program to Service Logistics, noting the importance and knowledge in the Netherlands, driven by the Dutch Institute for Advanced Logistics.Objectives:Increased level of quality and frontrunner service business in the NetherlandsIncreased attractiveness for foreign companies to invest in the NetherlandsSignificant contribution to decreasing emissions and energy use by optimal use of spare parts and reuse of materialsParties committed to the innovation program, a.o:
58 Innovation roadmap service logistics topics New service development:(Remote) condition-based maintenance/ logisticsTotal service supply chain coordination conceptsService differentiation and service level agreementsService process designICT based business support systems/ system planner interactionPooling & partnerships:Techniques for call screening & diagnosticsRemote (on-line) diagnostics and maintenanceBusiness models for network enterprises, control towersEnhancing field service mobilityCultural and behavior aspects of network enterprisesLifecycle engineering and management:Obsolescence managementInstalled base forecasting and managementLife Cycle analysis, closed loop supply chains, cradle-to-cradleDesign to service
59 Service logistics - innovation programs SINTASShared Business Intelligence CellMaSelMaIZI MotiveValue Creation by Closing the LoopPlanning ServicesUltimate Spare Parts PlanningProSeLoService Logistics for Advance Capital GoodsCoordinated Advance Maintenance and Logistics planning for the process industriesSustainable Service Logistics for Offshore WindfarmsA few examples on the next slides
60 Dutch innovation in service logistics Proactive Service Logistics for Advanced Capital Goods Innovative solutions for service control towers in order to achieve significant better system up-time whilst at the same time reducing TCO and improving competitive advantage.The sharing of spare parts that are owned by different companies or that belong to different service contractsNew concepts to deal with last-buy decisions and to facilitate the re-use of parts, modules, and systemsNew predictive maintenance concepts that make use of the possibilities of remote monitoring and diagnosticsCollaboration:Eindhoven University of Technology, Erasmus University Rotterdam, University of Twente, Service Logistics Forum (SLF), Ceva Logistics, DAF Trucks, Fokker Services, Gordian Logistic Experts, IBM, Océ Technologies, Marel, Stork Poultry Processing, Thales, Vanderlande Industries
61 Dutch innovation in service logistics Planning Services Objective: a framework for a Spare Parts Planning Control Tower Organization;• a Spare Parts Planning Control Tower prototype (working IT Solution);• a working and demonstrated Spare Parts Planning Control Tower;• a (remote) Spare Parts Planning Service concept.Collaboration:Gordian Logistic Experts, Eindhoven University of Technology, Netherlands Defense Academy, NedTrain, Alstom Transport, Defense Material Organization, ECT, Fujifilm
62 Dutch innovation in service logistics Integrated Maintenance and Service Logistics Concepts for Maritime AssetIn the maritime sector, service logistics support and maintenance of systems constitute a significant fraction of the exploitation costs. This project aims to increase the service logistics efficiency for these maritime assetsDevelop innovative concepts to improve the predictability of maintenance and service logistics demand,develop smart concepts of service logistics optimization, supply chain coordination and cooperation.Collaboration:Eindhoven University of Technology, University of Twente, Netherlands Defence Academy, Gordian Logistic Experts, Royal Netherlands Navy, Damen, Thales, Imtech, Loodswezen, Bolidt, Fugro, Alewijnse, Pon Power, Seamar, Mes Marine Services, Copernicos Groep, Asset Management Control Centre, Maritime Campus Netherlands, Dutch Institute World Class Maintenance
63 Dutch innovation in service logistics Value creation by closing the loop Monitored return chains ensure the retention of value of goods at the end of their lifecycle. This project examines a 4C idea for the reuse of semi-manufactured goods and raw materials in the manufacturing chain. This ensures as much of the material remains within the manufacturing flows and, in doing so, retains its value. Refuse retrieves economic value through reuse.Collaboration:12Return, Logitech, EVO, Spring Global Mail, PincVision, Rotterdam School of Management , University of Tilburg
64 Dutch innovation in service logistics Coordinated Advance Maintenance and Logistics planning for the process industriesIt is essential to develop maintenance/logistics strategies that minimize cost whilst maximizing the availability and safety of assets. Many process industry companies experiment intensively with condition-based maintenance (CBM), but preventive maintenance is still the norm. The main objective of this project is to further develop a control tower approach for maintenance and logistics planning in the process industries. The innovation focusses on data pooling across disciplines and companies in the services supply chain and sharing maintenance/ logistics resources and clustering operations.Collaboration:University of Groningen, Eindhoven University of Technology, University of Tilburg, Gasunie, Oliviera, ORTEC, SABIC, Sitech, SPIE, Stork
66 Successful spare parts management is key to high-tech business performance High-tech products and systems are increasingly complex, asset owners and OEMs demand higher service levels and the necessary supply chains are more dynamic. Service is a competitive factor for these companies.To ensure maximized uptime and minimized total cost of ownership, the supply of resources, especially spare parts, should be available and delivered right-on-time in case when needed.Spare parts inventory and logistics planning should take into account the low transport volumes and low stock turnover, optimizing between availability and low locked-in capital.Diversity between the unpredictability of failures and thus difficult planability of spare parts demand for corrective maintenance and the more planable spare parts based on preventive or condition-based maintenance.Repairable spare parts should be returned to a repair center if replacement spare parts are below forecasted demand levels.
67 Spare parts planning control tower IT tool in which the spare part management is orchestrated:ForecastingPlanningPurchasingSpare parts poolingThe control tower could manage multiple service supply chain companies and include:Supply chain management with managing the availability of supply source, determine the desired source (repair/procure) and select the desired contractRepair shop controlTransport coordination with distribution networkSpare parts packaging strategiesStock financingRecruitment and selection of new staff.Source: Innovatie Zuid, service logistiek in Zuid Nederland, 2012/ Project plan Planning Serrvices
68 Solution IT infrastructure - example Source: Gordian
69 Spare part planning experience demonstrator Source: Gordian/ Dinalog, 2013
70 Why locate your control tower in the Netherlands? The location for a service logistics control tower is more of a location where the company’s data and intelligence and decision-makers reside: Key decision factors for the Netherlands:Highly skilled expertise in service logistics, both from a knowledge, solution and logistics operation perspectiveTechnological capability to establish and maintain a control tower: superior IT infrastructure, being one of the most ‘wired’ countries in the world with the largest Internet Exchange offering an excellent high speed data network. Combined with world class sensor knowledge for system monitoringInternational business environment, with fiscal, communication and language skills base to cater for your worldwide service needsGood living environment for international experts, attracting your needed decision makers to serve your company’s global footprintA supporting government for an excellent breeding ground for innovation and international business in service logistics
71 Why locate your spare parts or return distribution center in the Netherlands? The Netherlands offers your service distribution center the perfect location to excel in service excellence in Europe and beyond. Key factors for the Netherlands:Strategic location: The central geographical position of the Netherlands, combined with accessibility and an excellent infrastructure provides the strategic location to serve market in Europe, Middle East and AfricaA superior logistics infrastructure: The Netherlands combines the perfect Gateway to Europe with the Port of Rotterdam as largest container port in Europe and Schiphol Airport a leading cargo airport in Europe, with an excellent hinterland network and access to main integrator hubs to serve quick response spare parts and return demands.An international business environment has supplied world-class business partners who know how to deal with global business challenges in today's economy.A competitive fiscal climate offers beneficial features for international tax planning, including a competitive corporate income tax, certainty in advance with OESO conform tax rulings, business-focused customs procedures incl bonded warehousing.
72 Dutch Spare Part IT solutions - examples Gordian has a flexible and modular development platform that enables them to affordably design and create professional, cost-effective and customer-specific solutions for spare parts management.ORTEC offers solutions for high demand forecasting and inventory planning, as well as decision support such as distribution strategies, and depot and warehouse locations.Slimstock offers sophisticated methods for forecasting irregular and slow moving items, such as spare parts, developed with scientific support from several universities.FPC offers supply chain packaging advice as well as a control tower solution for communication for packaging instructions in the (service) supply chain.
73 Dutch Spare Parts Logistics Service Solutions - examples SLS Benelux is specialist in parts logistics for service-related companies. SLS offers distribution, warehousing and control tower services allowing optimal routing of spare parts.CEVA Logistics offers global end to end supply chain management, to reduce risk and cost for spare parts on demand, and for making fast decision-making management possible.TNT Innight provides twenty-four-seven solutions to enable precisely timed services for nightly distribution of spare parts and other goods before the working day starts.Rhenus Logistics draw up individual, cost-efficient and sustainable solutions that link rail, air, sea and road transport services in a sensible way for spare parts and products.
74 Spare parts planning train maintenance repair NedtrainPart of the NS Group and specialized in train maintenance.175 years of experience in train maintenance.Also responsible for maintenance on Arriva, Syntus and Veolia trains.More than 30 strategic locations across the Netherlands.Responsible for timely, safe and clean traveling of 1.2 million train passengers every day.REQUIREMENTSContinuous up-time of systems.Lower spare part stocks.Lower inventory costs.Continuous service level improvement.High equipment availability for direct delivery / use.Insight for the supplier in the current and future demand of NedTrain.SOLUTIONAdvanced predictive inventory management models.Detailed add-on planning tool.Real-time order parameters.Algorithm for better forecasting delivery schemes (expected demand for the next 12 months).Better cooperation with suppliers.BENEFITSBetter understanding of demand fluctuations.Shorter delivery times.Inventory reduction of 8 million euro in one year (from 20 million to 12 million).Gains on both sides: NedTrain and suppliers.Source: NedTrain / DINALOG
75 Spare parts for aircraft maintenance Fokker ServicesIntegrated, knowledge-based services organizationValuable partner for the global aerospace industry (manufacturers, owners and operators) in the continued competitive operation of their fleet.Capabilities include Component Availability Programs, Flight hour based Component Repairs, Engineering and Documentation Support, and Airframe Maintenance, Modifications, Conversion and Completion capabilities.REQUIREMENTSContinuous up-time of systems.Lower spare part stocks.Lower inventory costs.Continuous service level improvement.Quick intervention: faster delivery from the same stock.Extended service market.SOLUTIONAdvanced predictive inventory management models.Detailed add-on planning tool.Algorithm for determining which Shop Replaceable Units (SRUs) and Line Replaceable Units (LRUs) should be in stock.BENEFITSBetter insight in the relation between repair times and stocks.Information about the likelihood that specific spare parts are required (insight in necessary SRUs and LRUs in stock).Source: Fokker Service / DINALOG
76 Spare parts planning poultry processing Marel Stork Poultry Processing (MSPP)Market- and technology leader in poultry processing.Offers in-line poultry processing solutions for all process steps and all processing capacities and sells poultry processing equipment.Member of the Dutch Poultry Centre (DPC), the organization for leading companies in the poultry industry chain.Extensive global network of almost 40 sales and service locations.REQUIREMENTSContinuous up-time of systems.Lower spare part stocks.Lower inventory costs.Continuous service level improvement.Quick intervention: faster delivery from the same stock.SOLUTIONAdvanced predictive inventory management models.Planning tool for detailed analyses of purchases, sales and resulting stock changes.Relocation of current stocks (Gainesville (US) and Boxmeer (NL) reduced to one location).BENEFITSBetter insight in stock fluctuations.Increase of service level from 97.3% to 98,6%Stock decrease of 22%.Source: Marel Stork / DINALOG
77 Spare parts supply automotive after sales IZI MotiveA Dutch SME originating from a DINALOG demonstration project.With an innovative approach of the core of the automotive business and its aftermarket: spare parts.Solutions for spare parts management, procurement, planning, inventory management and logistics.Control tower that connects manufacturer and garage.Approx. 70 affiliated garage businesses.REQUIREMENTSReduction of costs of spare parts for car repairsQuick response including same-day deliveriesReducing the number of deliveries to mechanics per daySOLUTIONOnline supply chain control tower IZI2 Connect for car mechanicsDeveloped with Slimstock and Eindhoven Technical UniversityIntegrated planning systemParts stock optimizationNight distribution via cross-dock locationsSupply chain orchestration of return flow, warranty and repair supportBENEFITSDirect ordering from independent parts suppliersOptimal attunement between stock, planning and ordersReduction of number of deliveries Cost saving of 15-20% on parts for mechanics35% total supply chain cost saving15% transport and warehousing cost saving potentialSource: IZI Motive / DINALOG
79 Maintenance ensuring optimal operations of production assets over their lifetime As advance capital goods and systems move from a product oriented to a function oriented industry, the supplier relationship has turned into performance-based contracts with service being a profit center and competitive differentiator.Challenge is to optimize operations – in terms of reliability, availability, maintainability and safety and thus to maximize uptime and optimize asset availability, by reducing failures and decrease planned and unplanned maintenance activities.This will increase customer satisfaction, decrease total cost of ownership, and can generate long-term revenues with high profitability. The maintenance sector in North West Europe alone is expected to have a 75 billion euros economic impact.Maintenance performs a key function in the enhancement of productivity and environmental sustainability as well.
80 Maintenance solutions – proactive service management Sensors and data gathering enables real-time monitoring of the functioning assets and failures and alerting.Big Data Science analyses the vast amount of data with smart algorithms resulting in insight in and anticipating failures, with preventive maintenance.Furthermore, predictive condition-based maintenance enables better planning of maintenance activities, including people and materials, resulting in shorter downtime, less lost production and cheaper and more sustainable repairs.Infosys, Leveraging After-Sales Service to Gain Competitive Advantage, 2011
81 Dutch maintenance IT solution providers - examples Algoritmica makes predictive maintenance software that predicts asset failures using machine data, decreasing downtime and maintenance costs significantly.ORTEC provides planning software for condition based maintenance based on data monitoring of operational and maintenance data.Districon develops and implements technical dashboards for the performance monitoring of advanced capital goods, such as rail equipment to provide insight in failures to appropriately plan maintenance.Oliveira offers an Asset Improvement Program for the high-tech, energy and maritime industries based on data analysis with a SAS connection to transition from ‘condition based monitoring’ to ‘condition based maintenance’.
82 Condition-based maintenance process industry ORTECORTEC headquartered in the Netherlands is one of the largest providers of advanced planning and optimization solutions and services.ORTEC’s products and services result in optimized fleet routing and dispatch, vehicle and pallet loading, workforce scheduling, delivery forecasting, logistics network planning and warehouse control.ORTEC has over 1,800 customers in 60 countries, 750 employeesORTEC has offices in various European countries and in North America. 60% of the logistics revenues came from foreign offices.REQUIREMENTSCost reduction and increase of reliability.Through efficient and condition-based maintenance.Data monitoring and availability.Smart use of operational and maintenance data.SOLUTIONMaintenance based on necessity instead of periodic or corrective maintenance.Clear timing of maintenance activities.A Quick Scan that can evaluate different maintenance strategies for a broad range of machines.BENEFITSAbility to compare traditional corrective strategies and modern preventive strategies (condition-based).Quantitative support in decision making.Balance between postponing maintenance and grouping different maintenance activitiesClear profits through optimization of maintenance strategies.Source: ORTEC / DINALOG
83 Predictive maintenance lithography machines ASMLFounded in the Netherlands in 1984, currently the largest supplier in the world of photolithography systems for the semiconductor industry.ASML manufactures complex machines critical for the production of integrated circuits or chips, such as CPUs, DRAM memory, flash memory.More than 70 locations in 16 countries with 13,800 employeesNet sales € 5,245 millionASML is traded on Euronext Amsterdam and NASDAQREQUIREMENTSCustomers require systems to always work.IF systems fail, rapid response is requiredMinimize Total Cost of OwnershipEnable shift from reactive to proactive maintenance: Know when a machine will be down and plan accordingly.SOLUTIONFrom Dinalog innovation project Proactive Service Logistics for Advanced Capital GoodsA predictive maintenance model developed with Eindhoven University of TechnologyBENEFITSPredictive maintenance model with 80% accuracyProven correlation between date on which the problem occurred and the type of problem without knowledge of the component provides accurate insight in machine downsSource: ASML / Gordian / DINALOG
84 Spare parts for marine vessels maintenance Command of the Royal Netherlands Navy (CZSK)Consists of fleet units and Marine Corps.Command the naval forces at operations at sea and from the sea.May provide support in disaster relief, humanitarian assistance, clearing explosives, firefighting, surface- and underwater searches.The Directorate Operational Support is responsible for the maintenance and resupply of ships and shore installations.Specialized in high-tech systems: propulsion, electronics and weapons.REQUIREMENTSContinuous up-time of systems.Lower spare part stocks.Lower inventory costs.Continuous service level improvement.Quick intervention: faster delivery from the same stock.SOLUTIONAdvanced predictive inventory management models.Detailed add-on planning tool.Algorithm for better monitoring of lead times and stock values.BENEFITSDecrease in stock value from 2,7 million to 2,4 million.Higher efficiency: the same number of items planned and managed with fewer people.Better monitoring of systems with the planning tool.New service provision.Source: Ministry of Defense / DINALOG
85 Predictive maintenance wind farm VattenfallVattenfall is one of Europe's largest generators of electricity and the largest producer of heat. Vattenfall produces electricity and heat from six energy sources – wind power, nuclear power, natural gas, biomass, coal power and hydro power.In 2013, operations were conducted in the Nordic countries, Germany, the Netherlands, France and the UK.Net sales: SEK billion (167.3) with some 32,000 employees.REQUIREMENTSReduce the 3-6% annual maintenance costs of wind farms, which can be up to 30% of the Levelized Cost of Energy.Reduce lost production, esp. due to surprise failures and long lead times.Increase customer satisfactionMake wind energy more competitiveSOLUTIONDutch start-up Algoritmica’s PreMonition for Wind Turbines: a predictive maintenance software solution providing 24/7 data-driven monitoring and analysis with sensors and machine-learning algorithms.BENEFITSPredicting failures long before they happen allowing better planning, e.g. scheduling maintenance activities together, and reduce lost productionAutomated data analysisSaving on spare parts.Standard customizable solution adjustable to specific circumstancesSource: Algoritmica
87 Competitive advantage by reverse logistics Reverse logistics is the process of moving goods from their typical final destination to another point for the purpose of capturing value otherwise unavailable, or for their proper disposal. Reverse logistics is based upon heightened environmental consciousness, public policy and regulation. Reverse logistics include damaged merchandise, seasonal inventory, restock, salvage, recalls, recycling, hazardous material, obsolete equipment disposal and asset recovery.Without a comprehensive return system for taking in, storing and redistributing returned items, companies can lose millions in revenue. Product complexity, outsourcing of manufacturing or repair, environmental pressure/ regulation as well as cost pressure all are critical to the reverse logistics supply chain. Companies should process returns at a proficiency level that allows quick, efficient and cost-effective merchandise collection and return.Main challenges: - Determining and tracking the value of the unit- Tracking warranty and routing status- Handling dealers and subcontracting in the reverse chain- Driving efficiency in repair or packaging processes
88 Specialised reverse logistics business software and service providers Business software specifically designed for the reverse logistics process is able to track the returns, invoices, warranty’s as well as third party contributors in the reverse logistics chain. Dynamic routing tools can optimize the return flows in complex multi-channel reverse chains by dynamic determination of the returns destination, either country or vendor driven. Furthermore specialized software with visualisation can support repair engineers but also personnel that has to package returns properly to retrieve product value, as return flows are smaller and less standard than forward flows.Specialised logistics partners with fully integrated software can shorten the link from return origination to the time of resell. One major challenge for logistics providers is performing all tasks for the retailer, including:Collection and scanningCredit store and invoice vendorProduct disposition
89 Dutch IT Solutions - reversed logistics Cycleon reduces complexity of reverse logistics by offering best-in-class reverse logistics solutions throughout the lifecycle of a product ranging from commercial, e-commerce, end-of-life and product recall returns.12Return helps to implement a controlled reverse chain by enabling the customer, the teams, carriers and fulfillment-, repair- and payment providers to work together.By working with ‘best in class’ third party logistics partners around the world, Teleplan provides reverse logistics solutions designed specifically to meet the needs and provide the right balance between cost efficiency and speed. The All-In Logistics Control cloud technology solution manages the reverse logistics flow and parts maintenance flow, with an end-to-end spare parts management program.
90 Reversed Logistics Service Providers in the Netherlands - examples Arvato designs the most efficient network for product returns and repair with regards to cost, customer satisfaction expectations, turnaround times and geographical target market strategies.CB Logistics provides state-of-the-art logistics facilities, incorporating services like warehousing, distribution, cross-docking, transport, reverse logistics and value-added logistics.ModusLink offers management solutions to simplify the returns process for retailers and manufacturers that want to improve service parts management and the value of returned assets by managing the end-to-end process.Syncreon has developed a comprehensively managed service, dramatically improving the reverse flow while significantly reducing operating costs.Large internationals in the Netherlands:
91 Smart reverse logistics IT Tool 12returnA Dutch SME originating from a DINALOG R&D project.Providing returns management software that supports a customer centric and sustainable supply chain that covers the return and re-use of products that cannot be used or are considered undesired or obsolete by it’s current user.Helping retailers to increase service, decrease costs and achieve a sustainable way of doing business.A Control Tower coordinating several reverse supply chains.REQUIREMENTSValue creation in the reverse supply chain (sourcing, customer, environmental and information).Economies of scale through supply chain coordination by a control tower.SOLUTIONReturns Management SoftwareImplemented software tool: Product Routing Algorithm (PRA) for dynamic routing.Clear return instructions for the end-user.Informing and planning the reverse supply chain.Optimizing international returns.Multi-vendor / drop-shipment returns.BENEFITS12Return platform handles returns from 13 European countries to the Netherlands and from Australia and the USA to Great-Britain.Source: 12return
92 Service parts packaging control Philips HealthcareRoyal Philips is a diversified technology company. The health care business makes up 42% of the global sales revenue.Products range from advanced molecular imaging systems, emergency care solutions, diagnostic ECG and X-ray to ultrasound products.More than 37,000 employees, working in 100 countries,Annual revenue € 9.6 billionAfter sales medtech 1 million orders, € 132 million international physical transport costs, 120,000 SKUs.REQUIREMENTSAfter sales service for medical devices requires quick response to ensure uptime and patient safetyCorrect packaging is needed for cost efficiency in terms of damaged products (defoa’s) (€ 8 million annually)Packaging policy is required for the accuracy of partsLower transportation costsSOLUTIONControl Tower solution developed by Dutch FPC, part of Faes groupInternet and visualization based control tool PackAssist including activity based costing for medical devices supply chainBENEFITSQuiet implementation of new suppliers, spare parts or policyEasy understanding for parts personnel by visualizationsWorldwide communication regardless of languageReduction of defoa costs from € 8 million to a few € 100kReturn on investment 1-2 monthsReduction of transport costs up to 90% for certain partsSource: Philips Healthcare / FPC / DINALOG